By Phil Gibson
Last Thursday, our CEO Jason Storah took part in a panel as part of The Economist’s Climate Risk Europe week. The keynote panel, “Aviva Canada Insight Hour: Building climate resilient communities” is painfully relevant after the summer Canada has just experienced.
From heat waves, to the wildfires in B.C., it’s been a summer of extreme weather. The findings of the latest IPCC report tells us what our data already reveals - that we can expect increased extreme weather in the years and decades to come, including coastal flooding, increased rainfall, and extreme heat.
For several years now, the insurance industry including IBC and ICLR have been advocating for “build back better”. For example, looking at a 2020 hailstorm in Calgary, the insurance industry will pay $1.3 billion in damage claims. For an additional 2.7%, or $35 million, insurers could install class 4 hail impact resilient asphalt shingles on these homes, reducing the risk of hail damage by up to 80%. It’s our role as insurers to support Canadians in protecting their homes, and in case of severe weather events, to help rebuild stronger communities with climate-resilient materials.
To help our customers build resilient, future-proof communities, Aviva Canada introduced overland water coverage in 2016, and gave incentives for homeowners to install sump pumps, and backflow valves to protect against flood. Our Green Assure endorsement covers homeowners for the cost of energy efficient and environmentally friendly products (e.g. insulation made of recycled plastic; geothermal heating system; certified sustainable flooring etc.) to replace damaged or destroyed property. Unfortunately, few have taken advantage of the endorsements offered.
Interestingly, in a recent customer panel conducted by Aviva Canada, over half of respondents rated climate change and sustainability as an issue of top personal concern. So, we know communities are thinking about the effects of climate change. Unfortunately, what’s clear from the panel is there is a major gap between beliefs, goals and actual actions and behaviours when it comes to leading a sustainable lifestyle and/or choosing green or climate resilient products. We need to better understand the barriers to taking action.
What can we do better to support communities in building climate resilience? In the words of Paul Kovacs, another panelist and Executive Director of the Institute for Catastrophic Loss Reduction (ICLR) whose Board I sit on, “how can we protect what is already built?”. On the Economist panel, Paul spoke to how implementing repairs for customers can provide the enormous opportunity of building back better. Seemingly small things like putting in backflow valves makes a huge difference in preventing future losses for homeowners.
That is why Aviva Canada chose to be part of ICLR’s Insurers Rebuild Stronger Homes program, the world’s first build back better program for insurers and insurance consumers. Work is well under way. The working group now understands the claim types and loss locations that are most impacted by the recommendations from the program, including installing high-wind rated shingles and using non-combustible exterior cladding, to name a couple. Our Personal and Commercial Lines teams are now working on their strategies to support the recommendations.
On the panel, Jason and Paul both raised the importance of working with government and the private sector, bringing the right people to the table to create the change we all want. With the COVID response, we saw governments across Canada, at all levels, come together and put resources towards protecting our citizens. We need to see this same urgency and commitment to climate change adaptation, and supporting our communities’ resiliency. Extreme weather like this past summer is here to stay – we know what’s coming. We need all hands-on deck and all the help we can get to tackle the climate crisis, and to build stronger, more resilient communities for Canadians.
Phil Gibson is Managing Director, Personal Insurance & Data Science at Aviva Canada.